Cardano NFT

Though a relatively new coin in the crypto space, Cardano (CCC:ADA-USD) has gained much traction among investors. ADA-USD has returned a whopping 1,134.5% since the beginning of the year and has recently become the third-most valuable cryptocurrency. It’s locked in a battle with Ethereum (CCC:ETH-USD) to become the main host of DeFi Apps and is so far doing incredibly well in building a robust foundation for the future.© Provided by InvestorPlace The Cardano logo and description on a smartphone.

Cardano was developed by the co-founder of Ethereum, Charles Hoskinson. It works on a proof-of-stake (PoS) protocol, where miners have to stake their crypto holdings to verify transactions. This results in lower gas prices and significantly faster transaction times.

Cardano still has a long way to outperform the crypto juggernauts in Ethereum and Bitcoin. However, it is a cryptocurrency with long-term potential to perform and hold its own during market dips.

Cardano’s Edge Over Its Competition

Cardano has attracted a lot of attention of late due to its scalability and low gas prices. Gas prices are a major concern for miners and have proven to be remarkably volatile in the past few years. Ethereum will be addressing these issues in its transition toward a PoS model.

Cardano currently boasts a fee of around 0.17 ADA, but this could change once the network gets congested. At this stage, virtually every cryptocurrency, including ADA, is a work in progress. Still, integrating smart contracts could give it a massive edge over its competition on the DeFi landscape.

Another element in Cardano’s favor is its dual-layer design which essentially separates the computations from the settlements. Ethereum, for instance, is a single-layer environment where virtually every element, including settlements and token transfers, occurs simultaneously.https://products.gobankingrates.com/pub/84d1cf40-924a-11eb-a8c2-0e0b1012e14d

The separation allows ADA to be run transactions with greater efficiency and at lower costs. Moreover, it uses almost no energy due to its closed-loop system. It uses an algorithm called Ouroboros, a symbol representing a serpent with a tail in its mouth. It is perhaps the most apt physical depiction of the proof of stake process.

Application In The DeFi Sector

Perhaps the most important aspect to consider with ADA is its pertinence in the DeFi realm. It already runs on a proof of stake network but lagged behind Ethereum in terms of smart contracts support until the release of the Alonzo hard fork. The Alonzo hard fork will facilitate the creation of smart contracts and the conversion of ERC20 tokens on the network. ERC20 tokens are typically behind most smart contracts and act as payment units, transaction units, and incentives.

Recently, Cardano’s commercial arm, EMURGOinvested $100 million to accelerate DeFi, non-fungible tokens (NFTs) and blockchain education efforts to improve ADA’s ecosystem. Moreover, EMURGO will also be investing in African startup hub Adanian Labs to create a dedicated operation from 2022.

Cardano will also enable a new DeFi stablecoin called Djed with its payment provider, Coti. The stablecoin will ensure price stability and help investors avoid high transaction fees.

All in all, it seems that ADA has impeccable fundamentals as we advance. Its dual-layer system and established proof of stake protocols will create a more conducive environment for hosting tokens and decentralized finance apps.

Bottom Line On ADA-USD

ADA-USD has been one of the top-performing cryptocurrencies since the beginning of the year. Its relevance in the DeFi world is what has investors salivating about its long-term prospects.

With smart contracts, it can now go toe-to-toe with Ethereum and expand its influence in DeFi. Additionally, it is investing a sizeable amount of its resources in improving the robustness of its platform. Hence, ADA-USD is a crypto to go long on.

Source Cardano’s Investments In DeFi Building Case for Massive Upside Ahead (msn.com)

By block head

Block Head is a blockchain journalist.